Taxation Expatriation: Will the Fast Act Stop Wealthy Americans from Leaving the United States?

28 Pages Posted: 15 Feb 2010

Date Written: December 1, 2003

Abstract

In the wake of September 11, 2001, several influential lawmakers have sought to pass tax legis lation that would reduce the tax benefits that may result from an American citizen expatriating to a foreign nation. An individual who relinquishes his or her U.S. citizenship and does not have a tax purpose for the expatriation ceases to be taxed as a U.S. citizen for U.S. income tax purposes. The estate of an individual who relinquished his or her U.S. citizenship with a "principal purpose" of tax avoidance is generally subject to a certain U.S. estate tax regime for ten years following expatriation. The Draft Fast Act is likely to deter certain individuals from expatriating for tax reasons. If a taxpayer views tax expatriation as a financial decision and solely weighs the financial benefits and costs of the decision, the denial of the tax benefits outlined in the Draft Fast Act would likely lean a potential tax expatriate against choosing to expatriate.Another factor that appears to be driving the refocus on the Draft Fast Act is the worsening budget deficit. By denying tax expatriates many of the tax benefits of expatriation, the Draft Fast Act is likely to lean the average taxpayer against expatriation based on a cost-benefit analysis.

Suggested Citation

Cantley, Beckett Gordon, Taxation Expatriation: Will the Fast Act Stop Wealthy Americans from Leaving the United States? (December 1, 2003). Akron Law Review, Vol. 36, p. 221, 2003. Available at SSRN: https://ssrn.com/abstract=1552967

Beckett Gordon Cantley (Contact Author)

Northeastern University ( email )

4471 Dean Martin Dr. #3708
Las Vegas, NV 89103
United States
702-881-4849 (Phone)

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